Subject: Re: hmm
From: Rich Bodo <rsb@ostel.com>
Date: Wed, 26 Feb 2003 16:23:40 -0800 (PST)


> Note that the feedback systems convert the overall system
> to one which satisfies the description of Le Chatelier's
> Principle.  Therefore it appears unstable, but is not.

AFAIK, everything is part of a bigger system.

> How does this apply to macro-economics?  Well my
> observation is that humans and human organizations model
> risk based on observed experience.  In an environment
> where nothing has gone wrong for a long time, risk is
> overly discounted.  Therefore I wonder whether the
> government should deliberately attempt to oscillate
> interest rates - to try to create periodic mild amounts
> of risk so that businesses avoid things like the dot
> bomb excess.

That's a very interesting idea.  You would design instability in for
the opposite reason it exists in aircraft designs.  You want small
movements rather than instant mobility.  Like little micro-quakes
instead of the big one.

> Without that you may have interesting speculations, but with little
> chance of making demonstrable progress towards useful conclusions.

Audacious speculation is always a precursor to fantastic progress, and
it's lots of fun even when it isn't.

-Rich

Rich Bodo | rsb@ostel.com | 650-964-4678